EURUSD
- The EUR/USD staged a recovery, reaching around 1.0950 early on Thursday. This bounce followed an intraday low at 1.0929 in the previous session.
- Data released from the US on Wednesday had an impact on the currency pair. Existing Home Sales increased by 0.8% in November, reaching a seasonally adjusted annual rate of 3.82 million, exceeding the market consensus of 3.77 million. This marked the end of a five-month decline.
- Additionally, CB Consumer Confidence rose from 101.0 to 110.7, reaching the highest level in five months.
- More data from the US is expected today, including Jobless Claims, the Philly Fed Index, and the third estimate of Q3 GDP.
- Investors are looking ahead to Friday's release of the Core Personal Consumption Expenditure (Core PCE), which is the Fed’s favored inflation measure. This report is considered crucial and has the potential to significantly influence market sentiment.
| SMA (20) | Slightly Rising |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: EUR/USD is reacting to a mix of US economic data, with a focus on housing and consumer confidence figures. The upcoming US data releases and, more importantly, the Core PCE report on Friday, will likely be the key drivers for the pair in the short term. Traders are closely monitoring these indicators to gauge the economic health of the US and anticipate potential implications for monetary policy.
GBPUSD
- GBP/USD is hovering around 1.2640 during the Asian hours on Thursday, making an attempt to recover from recent losses incurred on Wednesday.
- The UK Consumer Price Index (CPI) (YoY) figures showed a decrease to 3.9%, down from the previous figure of 4.6%. This was against the expected reading of 4.4% for November.
- Investors are anticipating key economic releases from the UK scheduled for Friday. These include UK Gross Domestic Product (GDP) and Retail Sales data. These releases are likely to provide further insights into the economic conditions in the UK.
- It's noteworthy that several Fed officials have emphasized a cautious approach and discouraged premature speculations on policy rate cuts. This cautious stance from the Fed is influencing market sentiment.
- Looking forward, market participants are awaiting key economic releases on Thursday for further insights into the US economy. These include US Gross Domestic Product Annualized (Q3), Initial Jobless Claims, and the Philadelphia Fed Manufacturing Survey.
| SMA (20) | Rising |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: GBP/USD is influenced by a mix of UK economic data, with a focus on the Consumer Price Index. Traders are keenly awaiting upcoming UK releases, especially GDP and Retail Sales data, to gauge the economic performance of the UK. Additionally, the cautious approach of Fed officials and the upcoming US economic data are contributing to the overall sentiment in the GBP/USD pair.
GOLD
- Gold attracts dip-buying on Thursday, reversing a significant portion of the previous day's decline from the weekly top.
- The US Dollar is struggling to capitalize on the overnight positive move. This is amid market expectations that the Federal Reserve could start cutting interest rates as early as March 2024.
- Several Fed officials have issued warnings that bets on an early rate cut from the central bank might be overly optimistic. This caution is expressed considering that inflation is still trending well above the Fed’s 2% annual target.
- Financial markets recovered their optimism in mid-European trading, particularly after the United Kingdom reported that inflation in the country eased further in November.
- Investors are still eagerly awaiting the release of the United States (US) Personal Consumption Expenditures (PCE) Price Index. This index is the Federal Reserve's favored inflation gauge and is scheduled for release on Friday.
Closing statement: Gold is experiencing a rebound as it attracts dip-buying, influenced by the struggles of the US Dollar and caution among traders regarding the Fed's rate cut expectations. The upcoming US inflation data, especially the PCE Price Index, is a key event that investors are closely monitoring, as it could significantly impact the direction of gold prices.
CRUDE OIL
- West Texas Intermediate (WTI) price is hovering around $74.00 per barrel during the Asian session on Thursday, showing a continuation of losses from the previous session.
- The US Energy Information Administration (EIA) reported an unexpected rise in US Crude inventories for the week ending on December 15, reaching 2.909 million barrels. This unexpected inventory build contributes to the bearish sentiment in the Crude oil market.
- The EIA also reported that US Crude output reached a record 13.3 million barrels per day (bpd) in the last week. This record level of production adds to the complexity of dynamics in the Crude oil market.
- Despite the bearish inventory data, prices find support from escalating tensions in the Middle East. Geopolitical factors often have a significant impact on oil prices.
- The coalition led by the United States, responsible for monitoring the price cap on Russian seaborne oil, implemented substantial modifications to its compliance framework on Wednesday. As per the updated regulations, Western maritime service providers will soon need declarations from their counterparts, verifying that the sale of Russian oil adhered to the stipulated price cap.
| SMA (20) | Falling |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: The Crude oil market experiences mixed dynamics, with bearish elements such as unexpected inventory builds and record US Crude output, countered by geopolitical tensions in the Middle East supporting prices. The recent changes in the compliance regime for seaborne Russian oil also add to the complexity of the market. Investors are closely watching these factors to gauge the future direction of Crude oil prices.
DAX
- On Wednesday, German producer prices declined more than expected in November. The decline was by 0.5%, signaling a softer outlook for consumer price inflation. This may have implications for the broader economic landscape.
- Contrary to the decline in producer prices, German consumer sentiment improved more than expected. The GfK Consumer Confidence Indicator increased from -27.6 to -25.1 for January. Improved consumer sentiment can positively impact economic activities.
- ECB Executive Board members, including Bundesbank President Joachim Nagel and Klaas Knot, President of De Nederlandsche Bank, countered market-friendly economic indicators. They warned that it was too early to call victory on inflation, which runs counter to market expectations of rate cuts.
- On Thursday, investors need to consider commentary from ECB Chief Economist Philip Lane.
- The Chief Economist warned yesterday that wage growth across Europe could fuel consumption and inflationary pressure, aligning with the cautious stance against calling victory on inflation too early.
| SMA (20) | Rising |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: The DAX faces mixed signals with producer prices declining more than expected but an improvement in consumer sentiment. The comments from ECB Executive Board members and the Chief Economist highlight the ongoing debate around inflation and potential rate cuts. Investors are closely monitoring these factors for insights into the future movements of the DAX.